Prime Minister Julia Gillard will not support any moves to legalise illicit drug trade despite the strong support thrown behind the idea by one of her key cabinet ministers.

"I am not in favour of decriminalisation of any of our drug laws," Ms Gillard told The National Times on Tuesday.

She was responding to a report issued on the same day by Australia21, which underscored that the costly fight against the proliferation of illegal drugs has largely failed despite the billions spent by governments around the world.

The reports enjoys the backing of former Australian officials who had participated in combating the drug menace and now strongly support the group's suggestion of decriminalising low-level drug use.

Within the realm of Australia21's arguments, the report advocates for government supervision of the drug trade in Australia - regulating and taxing its commercial sale while at the same time providing more viable medical intervention for those who are hooked with the substance.

Foreign Minister Bob Carr has expressed his support on the recommendations floated by the new report, which stressed that existing laws against drug use were "killing and criminalising our children and we are all letting it happen."

Carr said that efforts by authorities to put a stop on illegal drug trade were ineffective and the unabated underground selling of the substance has for the most part delivered damaging blows to the Australian society.

He hinted that following the example of Portugal, where possession of small amounts of narcotics is considered legal, could prove a good start for Australia.

The Australia21 report stressed that it would not want drugs to become readily available for everyone, insisting that strict implementation of the products' commercial selling should at least allow the authorities to monitor buyers and users of the substance.

Minors of course should be prohibited from accessing drugs, the report said.

But Ms Gillard was far from convinced that such qualification will eliminate the grey areas that normally characterised the drug trade.

"Drugs kill people, they rip families apart, they destroy lives and we want to see less harm done through drug usage," the Prime Minister said.

And Ms Gillard found an ally on Victorian Premier Ted Baillieu, who declared on Tuesday that suggestions of decriminalising drugs under his administration will not flourish.

"We think there is a huge downside to the use of drugs in mental health and in a range of other areas," Baillieu was reported by The Age as saying.

He, however, allowed that he would be happy to witness the reduction of drug use employing the tactics suggested by the Australia21 report.

In a sign that the government could likely consider the controversial ideas being peddled by Australia21, the office of Federal Mental Health Minister Mark Butler issued a statement on Tuesday saying that the department "will look carefully at this report and the contribution these prominent Australians have made."

"Any move to soften the stance on illicit drug use in Australia would need to be carefully considered," the statement added